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Invoice discounting enables you to take out a loan using unpaid invoices as collateral.
The loan amount typically ranges between 80% to 95% of the value of the invoices, which you will pay back (with interest) once you receive payment from your customers.
In this example, you will be given $10,000 x 80% = $8,000 of cash. After you have collected on the invoices, you will pay back $8,000 plus the agreed fee to the lender.
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